{"id":809556,"date":"2026-10-21T10:10:16","date_gmt":"2026-10-21T10:10:16","guid":{"rendered":"https:\/\/www.newsbeep.com\/uk\/809556\/"},"modified":"2026-10-21T10:10:16","modified_gmt":"2026-10-21T10:10:16","slug":"uk-government-borrowing-rises-to-24-5bn-as-john-healey-prepares-for-budget-government-borrowing","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/uk\/809556\/","title":{"rendered":"UK government borrowing rises to \u00a324.5bn as John Healey prepares for budget | Government borrowing"},"content":{"rendered":"

The Treasury ran a higher than expected budget deficit of \u00a324.5bn last month as rising inflation pushed up the interest paid on government debt, increasing pressure on John Healey<\/a> before his budget next week.<\/p>\n

Official figures show the government paid \u00a310.9bn in debt interest: the highest September figure since records began, and only the eighth time the monthly number has been above \u00a310bn.<\/p>\n

Some government bonds are directly linked to the retail prices index measure of inflation, with payments rising in line with it. RPI has increased in recent months as the Iran war has pushed up energy costs. The Office for National Statistics<\/a> said this had added \u00a34bn to debt interest costs in September alone.<\/p>\n

Total government debt is estimated to have hit \u00a33tn for the first time \u2013 although as a share of the size of the economy it has fallen to 94%, from 95% a year ago.<\/p>\n

The \u00a324.5bn monthly deficit on the public finances was up from \u00a317bn in August, and \u00a31.9bn higher than the independent Office for Budget Responsibility<\/a> had forecast.<\/p>\n

In the financial year so far, public sector net borrowing is \u00a397.8bn, the ONS said \u2013 \u00a34.4bn lower than last year but still \u00a36bn higher than the OBR expected.<\/p>\n

The data underlines the impact of the Iran war on the public finances, before the budget next Wednesday.<\/p>\n

Healey has been keen to stress his determination to stay within the fiscal rules<\/a> set out by his predecessor as chancellor, Rachel Reeves.<\/p>\n

However, he is widely expected to accept a slimmer financial buffer, or \u201cheadroom\u201d, against those rules than the \u00a324bn Reeves had built up at the time of her spring forecast<\/a>.<\/p>\n

Higher inflation tends to be good for tax revenues but it also squeezes how much government departments can achieve within fixed budgets.<\/p>\n

Receipts from income-related taxes were up more than 7% on the same month last year in September, and corporation tax by 9%, aided by stronger than expected economic growth \u2013 but these higher receipts failed to offset the rising debt interest bill.<\/p>\n

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Martin Beck, the chief economist at the consultancy WPI Strategy, said the latest data was \u201can unwelcome reminder of the pressures facing the chancellor ahead of next week\u2019s budget\u201d.<\/p>\n

Healey is under pressure to provide relief from rapidly rising energy costs<\/a>. Greg Thwaites, the interim chief economist at the Resolution Foundation, said the public finances figures suggested he would have to take a cautious approach.<\/p>\n

\u201cThe support must be temporary and targeted given the state of the public finances. Borrowing is already off track this year, debt has hit \u00a33tn, and markets are closely scrutinising the government\u2019s ability to keep on top of the public finances,\u201d he said.<\/p>\n

The Conservative shadow chancellor, Andrew Griffith, said the figures showed Labour should do more to tackle the deficit. \u201cGovernment borrowing of more than \u00a33tn \u2013 the highest in history \u2013 and rising inflation show Labour has lost control of the economy,\u201d he said.<\/p>\n","protected":false},"excerpt":{"rendered":"The Treasury ran a higher than expected budget deficit of \u00a324.5bn last month as rising inflation pushed up…\n","protected":false},"author":2,"featured_media":809557,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[84,59,56,54,55],"class_list":["post-809556","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-business","tag-gb","tag-uk","tag-united-kingdom","tag-unitedkingdom"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/809556","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=809556"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/809556\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/809557"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=809556"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=809556"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=809556"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}